Saturday, August 15, 2015

Property Taxes

Various "Big-box" stores are appealing their property tax assessments. They are appealing to the Michigan Tax Tribunal. The stores contend that "property" tax assessments should be based on the fair market value of land and the building. Further, they contend that the "base" was inflated by the taxing authority because the assessor included the "brand value" of the franchise, the inventory and the value of the cars in the parking lot. They contend that the "base" should be pegged by the transaction price of the most recent vacant "Big-box" building that was sold...normalized per-square-foot.

For the most part the Michigan Tax Tribunal has been ruling in favor of the "Big-box" stores.

What I find interesting is that the person being interviewed seems offended that the businesses are contesting. She seems to be of the opinion that they should be good corporate citizens and be passive tax donkeys.

After the Michigan tax tribunal agreed with the first few filers, their dockets were swamped by a tsunami of applicants who wish to exercise the same argument.

This looks pretty ugly for those communities who balanced their budgets by artificially inflating the assessments on non-residential (i.e., non-voter) property. Some of the communities who lost these appeals owe refunds to the enterprises they attempted to milk.

It will be interesting to see how quickly this spreads to other states.